Choosing the Right Investment for You

Drag to rearrange sections
Rich Text Content

Being in a situation where you have some money to invest, and you are fortunate enough to be able to take a few risks, there are so many different trading options available to you that you could spend a lot of time just going through the information pamphlets and websites of investment opportunities that fit that bill.

What kind of person can afford to take risks with their investments though? Probably someone who is still very young, relatively debt free or completely debt free, has more money coming in than what their expenses take up, or they are older but have a comfortable flow of income and have built up some money to play with that they wouldn't regard as a crisis if they lost the money.

Whatever your reason, for wanting to get into higher risk investments, it is a very nice situation to find yourself in.

We will now get into exactly what it is you can do in order to get into these types of investments...

Although we have established that the discussion will be focused on higher loss investments, it must be said that no investment portfolio should be completely filled with high loss investment assets. Any reasonable investment portfolio should comprise out of the three risk classes of investment, namely, low-risk investments, which are slow in capital gains but are much more stable and in some cases up to 99% guaranteed.

Medium risk investments, which have faster gains but are more a mixture of high loss investments and low loss investments. Medium risk investments are a favorite for many people since they usually come with emergency exit plans which minimize any rare losses.

We will assume then that everybody seeking to enter the higher loss investment market is doing so with the portion of their investment fund allocated to the high risk category and not those who are putting all their money into this category.

Now for the exact endeavors, in the high risk category, which suitors can invest in...

Money that you put into high risk investments is money you are willing to lose, so if you are not willing to lose that money, it should go into the medium-to-low risk investment category.

Firstly, gambling (legal gambling), like at the casino is high risk. In some cases you have a fifty-fifty chance of either doubling your money or losing all of it, but this is not advisable. Gambling is the fastest way to make money but it is also the fastest way to lose money and it is only mentioned so as to ensure the information is complete.

Secondly, trading. While the entire process of trading can be approached as a long term investment, if it is to be classified as high risk investment, trading refers to short term positions with results that fluctuate very quickly.

This includes the likes of Forex, where you buy and sell currency according to what you think the value of the currency will do, short selling, where you sell stocks with the promise of buying them back later in anticipation that they will drop in value and even short term shares trading.

Generally, high risk investments can have great returns if things go right for you, but they can have adverse losses if the shoe comes on the other foot, so it should be reiterated that if you are to go into high risk investment, it must be with money you are willing to lose.

Drag to rearrange sections
Rich Text Content

Page Comments